Tag Archives: Provo

I’ve long maintained that Google isn’t in the ISP business for the long haul. I said over four years ago that the odds of your city seeing it were astronomically low. Well, now Google is basically saying the same thing. The CEO announced that they have halted expansion of the network, let go employees in towns where they haven’t build, oh yeah, and he’s leaving for “other opportunities”. I’ve had multiple first-hand reports of users in Provo who have been unable to get signed up for unspecified reasons, even after Google said they were coming. So what happened?

Google simply bit off more than they could chew. Investors do not like Google pouring money into something this capital-intensive with an ROI so far out. In every market they have attempted to deploy in, they are hit with constant roadblocks from incumbents, something any sane person with industry knowledge could have foreseen from miles away. The lack of voice and 100Mbps products lead to lower than expected adoption and even the loss of customers in Provo, something that I (among others) warned about immediately. Google eventually added these, but it seems to be too little, too late.

Google’s original promise was to form public-private partnerships with cities. Once they launched in Kansas city, it became clear that the “partnership” was reduced to operating like a standard duopolist while using brand power to extract all kinds of benefits from the city. The same thing happened in Provo when the city took a multi-million dollar bath on a network that was around break even on operating expenses and debt service. The model was “give us everything we ask for because we’re famous and fabulous”. The obvious cherry-picking and red-lining was swept under the rug with promises of “eventual” universal rollout, something that now looks increasingly unlikely.

I don’t mean this to just be a smug “I told you so” post (though I would be lying like Donald Trump if I said I wasn’t taking at least a little glee in having been right for so long as the haters yelled at me). It’s to point out that real broadband improvement starts at home. It means you, your community, your city all working together to improve the outcomes. Google was about as close as I’ve ever seen to a large scale broadband Santa Claus and it appears poised to pratfall on the stage.

My take is that we’re seeing the slow decline of Google Fiber. Cities who have it now should be working on their contingency plans for if (or, more likely, when) Google decides to pull the plug. Cities who were hoping for it (including both those who were and were not in talks with Google) need to move on to a new plan. It could be a true public-private partnership, a full-on municipal network (UTOPIA will still be happy to have you), or a privately-funded user-owner cooperative. What won’t work, be it Google or Comcast or CenturyLink, is hoping that you can just wait your way into better broadband.

Competition is good, and Comcast is just now proving it. I spoke with one of their sales guys who confirmed that Comcast will be offering a package of 250Mbps/50Mbps for $70 starting in September, but only in Provo. (Sorry, everywhere else.) This is in direct response to Google Fiber coming to town and will include a new modem with a built-in 802.11ac router to take advantage of the speed bump. It’s unknown if this speed tier will land in any other cities in the future.

This is yet another story proving that having a fiber network in your town benefits everyone, not just subscribers.

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Update: Yep, I totally missed this one, the one time out of dozens that it actually proves to be true. Glad the troll commenters are having a good time with it.

Provo (or, more specifically, Mayor John Curtis’ office) has been hyping up an “epic announcement” for weeks now. Somewhere in the speculation came a number of rumors that Google Fiber would be swooping in to either take over or supplant iProvo. Quite frankly, that’s an absolute load of malarkey. Nothing in the history of either Provo’s handling of its fiber optic assets or Google’s launch of Google Fiber cities would suggest anything like it.

For starters, we have to consider the way in which Google announces new fiber cities. Its history has been to send out a press release at least a few days out to generate buzz and send invitations to the tech and national press. This is not a company that announced these kinds of projects without a serious amount of fanfare.

Google also has a history of liking to roll its own solutions. One of the ways it got so big so fast was to create servers based on their own custom specs, not buying expensive off-the-self servers. Google Fiber is no different. They seem to relish the idea of starting from scratch and making something uniquely theirs. iProvo would require extensive upgrades to support 1Gbps connections and an entire head-end replacement to support modern MPEG-4 video.

There’s also the point of Google’s tacit support for municipal networks. Swooping in to take over a network would undermine their unspoken support for poking incumbent operators in the eye. Their goal has always been to shame ISPs into providing better service, even if that means throwing them under the bus in favor of municipal options. Taking over a network doesn’t match up with that at all.

The kicker, though, is Google’s terms for setting up shop. So far, Google has set it up so that they can walk away from their network if they decide it’s not for them. That probably sits just fine in Kansas City and Austin where they aren’t really on the hook for much. But Provo? They’ve spent half a decade trying to run away from iProvo. Any deal that doesn’t involve them washing their hands of the network would be anathema to every single action the city has undertaken under two different mayors and a lot of different council members.

Make no bones about it: Provo is not getting the bailout it so desperately desires. Hyping up these rumors does nothing to actually fix the situation, but it does distract from real looming problems like Veracity’s lease of the network expiring in two months. Instead of trying to find a white knight savior, it’s time for Provoans to demand that their elected officials address the elephant in the room instead of continuing to punt.

PS I’ve already told you to stop daydreaming and build the same kind of network that Google is. What are you waiting for?

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Most of you are already aware that Veracity’s reserve fund for iProvo has reached the point of potentially triggering a default. From the news stories you’ve read, odds are good that you think that Broadweave 2.0 is about to come crashing down on the city. I’ve sat down with Veracity and Mayor Curtis to get the real deal story and I don’t think it’s the apocalyptic scenario that sells papers and glues eyeballs to evening newscasts.

First off, I’ll give you Veracity’s side of things. They went into the network expecting to spend about $2-3M on network upgrades. To date, they say they’ve dropped a good $8M on fixing things up. For that investment, the network can cover both operating expenses and debt service, but there is no money left over for installations, marketing, or network upgrades. Veracity could choose to cross-subsidize the network, but that eats into their budget for expansion. The current strategy has been to try and expand to other markets to leverage the video head end and spread out the cost of the NOC, primarily through building fiber to CenturyLink cabinets, co-locating, and selling services over a U-Verse-like ADSL2+ network. If they pumped more money into iProvo itself, it stunts these growth efforts. It’s a short-term gain for a long-term loss. Neither the city nor Veracity would win under the current scenario.

It’s almost become too easy to pick on the Utah Taxpayers Association when they get a story so very, very wrong. The latest work of fiction is their tortured stance on iProvo, one in which they perform twists of logic to support how things have unfolded with iProvo and yet continue to vilify what UTOPIA does. As usual, this requires a point-by-point breakdown of where they lack any kind of consistency and twist or invent facts to support their weak sauce arguments.

An anonymous tipster pointed out that Provo is currently soliciting Requests for Qualifications for iProvo. The RFQ itself is very specific in stating that while it’s looking for companies who could take over the network, nothing in it should be construed to imply that the city actually anticipates getting the network back at this time. Based on Veracity’s particular situation, I’d be disinclined to believe otherwise.

So what does it mean? I’m guessing that the city doesn’t want to be caught unprepared yet again (*cough*HomeNet*cough*Mstar*cough*Broadweave*cough*) should the worst happen. One bitten, twice shy. If you think your ISP has the chops to take it over should the need arise, you’ve got until February 28 to get your name on the list. For what it’s worth, I’ve asked Veracity if they had anything to add, but I haven’t heard back from them yet. If/when I do, I’ll be sure to add it up here. I’d imagine, though, that this story is about as cut and dry as it seems.

Last night, Provo Mayor John Curtis gave an update on iProvo and the city’s continuing involvement with the network and it looks like the city finally has an executive who wants to face facts. The reality of iProvo (or more accurately, the network sold to Veracity) is that revenues still don’t cover bond payments and aren’t likely to do so for quite some time. Veracity has already told me as much and that the single-family home business, which is both difficult and slow to grow, is the only thing left. It’ll probably be a while before revenues can cover the bond, and the payments will have to be cross-subsidized. The question, though, is who will do it.

Veracity has already received a break on payments, a break that runs out in just a few months. I’m confident that they can and will (but more importantly, should) continue to cross-subsidize Provo operations from other divisions of the company. Mayor Curtis’ remarks, though, seem to indicate an expectation that the city generally will have to continue to pick up part of the bond payments. I wouldn’t have much of a problem with this if Provo were continuing to operate the network with a wholesale open-access model, but effectively subsidizing a private company gives me serious pause.

I believe that Veracity is a good company and that they’re not out to pull a fast one on anybody. That said, I wouldn’t blame them for negotiating whatever they can get from the city. It’s the same as Google: “don’t be evil” doesn’t mean you should give up your strong negotiating position out of the goodness of your heart. And right now, Veracity is holding all the cards.

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And here you thought that everything iProvo had been said or done. Provo Mayor John Curtis will be holding a meeting on economic development on Thursday September 30 which will include a breakout session on iProvo. If you find yourself wondering what’s going on with the network or how (if?) the city is still using it, this is your shot. The public has been invited to participate at the Covey Center for the Arts (425 W Center St) from 7PM to 8:30PM.

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Both the Salt Lake Tribune and Daily Herald have run articles about closed-door meetings between Provo Mayor John Curtis and members of the municipal council. These meetings included only a few council members at a time so as to avoid the requirement to hold open meetings. An e-mail from the mayor indicated that these meetings were to discuss a “plan B” for iProvo. There’s just one small problem: Veracity (or at least the C-level executive there I talked to) apparently had no idea the meetings had taken place until I called to find out what’s up.

I have a number of problems with this, not the least of which is the environment of fear, uncertainty, and doubt that this creates. You may recall that Provo had to have a number of meetings in the midst of Broadweave’s impending default to figure out what to do prior to the network being handed back to the city in worse shape than when it left. You may also recall that I had copious amounts of sharp criticism for Broadweave, all of which was based on the company history (or, more precisely, the lack thereof), hearsay about the internal disfunction at the company, and confirmations that they had to continue to use a line of credit to continue making bond payments. In this case, Veracity is a company with a solid reputation, no reportable internal strife, and a healthy cash flow from other operations. In short, there is little evidence from that side that any kind of network trouble is in the works at all.

Unfortunately, the refusal to discuss the “plan” B and how likely or, in my belief, unlikely it may be in a public venue combined with a media tendency to puff up bad news (love you guys, but you do it way too much) has combined to create nothing more than a cloud of unfounded speculation and innuendo. While Broadweave was always tight-lipped about operations, Veracity has been very open with me and has pretty bluntly stated what they’re doing with the network: cross-subsidizing it while pursuing the only customers really left, the single-family homes. Given their strong presence in other markets, I don’t doubt their capability to do so. Selling millions of minutes of voice a month is much more stable than a thousand double-play customers in an insulated (and competition-free) housing development.

This kind of pessimistic journalism, while no doubt backed up by experience, is not new. UTOPIA regularly faces one-sided stories and unrebutted opinion pieces in all of the major dailies. The only paper that consistently seems to take their job of presenting all facts seriously has been The Davis County Clipper. This is simply unacceptable. There are a lot of people depending on the newspapers to get the story straight the first time, even if it means pushing back the deadlines so you can track down and talk to other sources.

(For the record, I actually agree with Royce Van Tassell on something: more open meetings are a Good Thing. I’ve been hounding UTOPIA for the better part of two years to toss more data out in the public. Provo shouldn’t resort to so much secrecy.)

As I predicted yesterday, Provo’s Municipal Council signed off on the proposal from Veracity to merge with Broadweave and float some of the bond payment for 10 years. (I also totally called Steve Turley voting against the proposal.) I’m not surprised at all given the political climate surrounding the network. Iin a worst-case scenario where Veracity gives the network back, Provo will have had more time to come up with a Plan B and the willingness to execute it.